By Will Dawes, Heavy Truck & Trailer Sales Representative at Hayworth Equipment Sales
Equipment financing can be tricky to navigate in today’s market. With Western Canada’s economy seemingly on the mend and winter around the corner, many of us in the transportation industry are ready to get to work. This begs the question; what is the best option to get the equipment you need to get the job done?
While used equipment is an attractive option to keep costs down, there are several things to consider before jumping in. Banks and lenders see older trucks, trailers and equipment as a greater risk to finance. Because of this, the term of your loan may be shorter and the interest rate higher.
Example:
A $50,000 loan on a new unit over 84 months @ 6% interest has an approximate payment of $766.
A $40,000 loan on used unit over 60 months @ 9% interest has an approximate payment of $1,064.
This higher payment, combined with the higher operating cost of used equipment, creates higher monthly costs. Wearable items such as tires, brakes, bushings and running gear should all be factored into your budget when considering a used purchase. Most new equipment comes with a comprehensive warranty provided by the manufacturer, allowing you to keep operating costs down and helping avoid unexpected expenses.
There is always the potential to find a great deal on a used piece of equipment, but keep in mind it can come with costly surprises down the road.